Here’s my column from this weekend’s Globe and Mail.
When Jane Jacobs died two years ago, she was working on two books. One was to be called A Short Biography of the Human Race and was going to refine the ideas she had begun to develop in her short, fierce book of warning essays, Dark Age Ahead.
I was very much looking forward to what she had to say about a possible
future that she viewed with more hope and optimism than her last
published work would lead people to believe.
Her other project was equally ambitious. Uncovering the New Economics
was to be an anthology of her thinking on economic life. She was busy
choosing excerpts from a lifetime of writing and thinking on the nature
of economies and cities, seeking through hindsight the coherence in
insights she described as “accidental” (but that seemed to me anything
but).
Tomorrow, on the anniversary of her birth in 1916, it’s Jane Jacobs
Day in Toronto, but her influence has reached much farther than her
adopted city. Ms. Jacob was vitally important in explaining what makes
great urban neighbourhoods. As an activist, she stood up to New York
City planner Robert Moses and helped to stop neighbourhood demolitions
in Greenwich Village, Toronto and elsewhere.
Always her own woman, she had a different notion about how she
wanted to be remembered. As she explained to reporter Bill Steigerwald
in 2001: “The most important thing I’ve contributed is my discussion of
what makes economic expansion happen. This is something that has
puzzled people always. I think I’ve figured out what it is. Expansion
and development are two different things. Development is
differentiation of what already existed. Practically every new thing
that happens is a differentiation of a previous thing, from a new shoe
sole to changes in legal codes. Expansion is an actual growth in size
or volume of activity.”
In all her work, most pointedly in the didactic dialogue of The Nature of Economies,
Ms. Jacobs brought new angles to bear on the logic of growth. She
looked to nature and ecologies for her insights, as well as the
streetscapes and people around her, and took on the giants of the
dismal science with zeal.
Adam Smith argued in The Wealth of Nations that
specialization, efficiency and division of labour are the cornerstones
of modern economic growth. Later, David Ricardo’s theory of comparative
advantage argued that not just firms but countries gain advantage by
specializing in certain kinds of economic activity.
Ms. Jacobs agreed that specialization has its uses, but she focused
on an even more fundamental source of economic growth – or what she
terms expansion. Like the great economist Joseph Schumpeter, she
emphasized the critical importance of innovation and entrepreneurship.
In her eyes, the prospect of new types of work and new ways of doing
things drove large-scale economic expansion.
But where most economists located momentum in great companies,
entrepreneurs and nation states, Ms. Jacobs presciently identified
great cities as the prime motor force. Companies come under
extraordinary pressure to specialize – to do things more cheaply,
efficiently and uniformly. But cities are host to a wide variety of
talents and specialties, the broad diversity of which is a vital spur
to creating things that are truly new.
In The Economy of Cities, Ms. Jacobs wrote: “The diversity,
of whatever kind, that is generated by cities rests on the fact that in
cities so many people are so close together, and among them contain so
many different tastes, skills, needs, supplies, and bees in their
bonnets.”
Along the way, she also refuted the long-standing theory that cities
emerged only after agriculture had paved the way for them. Productivity
improvements in agriculture, she pointed out, always originated in
cities before being adopted in rural areas.
Ever since Alfred Marshall’s seminal writings, economists have
thought of cities as clusters, or “agglomerations,” of firms, factories
and industries. Ms. Jacobs turned this notion on its head, arguing that
the true power of cities comes from their people. This human clustering
makes each who reside in it more productive, which in turn makes the
place they inhabit much more productive. Our collective creativity and
economic wealth grow accordingly.
In his essay on the “mechanics of economic development,” the Nobel
Prize-winning economist Roger Lucas of the University of Chicago wrote:
“I will be following very closely the lead of Jane Jacobs, whose
remarkable book, The Economy of Cities, seems to me mainly and
convincingly concerned … with the external effects of human capital.”
He later dubbed the clustering of human capital a “Jane Jacobs
externality” and added that her insights were so fundamental that Ms.
Jacobs – neither a trained economist nor a college graduate – deserved
the Nobel Prize in economics.
I’ll go one further. Ms. Jacobs stands without equal as the single
greatest economic and social thinker of our time. I learned the secret
of her genius when I had the privilege of spending time in her home in
the Annex area of Toronto and sharing the podium with her at an event
in the city’s Distillery District.
Ms. Jacobs cautioned me never to be blindsided by overly academic
theorizing, but to keep my eye on our shared human reality. That is
exactly what she did – trained her keen powers of observation on “just
everyday life.” More than anyone else, she was able to distill the very
essence of our greatest achievement as human beings: our cities, and
the way they shape our economy and society.
Richard Florida is the author of Who’s Your City and director of the Martin Prosperity Institute at the University of Toronto.
